How soon can you buy a home after a short sale using a VA loan?
VA loans offer much simpler guidelines for buying after a short sale than other loan programs. In addition to not needing a down payment, you do not have to pay mortgage insurance with a VA loan. The home must be for the purchase of your primary residence, as opposed to an investment property.
The waiting period to obtain a VA loan after a short sale is typically 2 years. If you have late payments prior to the short sale, most banks will expect you to wait 2 years and have no late payments on your credit cards in the last 12 months prior to applying for a VA loan.
However, there are cases where veterans can get another VA loan within a year after a short sale. Veterans who have paid their mortgage for the 12 months prior to the short sale and have a 660 or higher credit score may be eligible for a VA loan immediately following a short sale if the short sale is recorded as being paid in full on the credit report.
VA Loan Requirements:
As with applying for any type of loan, you will need to show proof of income and have good credit.
To be approved for the new VA home loan:
You must maintain good credit after the short sale
You must re-confirm eligibility by applying for an updated Certificate of Eligibility (COE) with a VA Form 26-1880.
The short sale must not have been performed in order to make a strategic sale
You must not purchase a similar or superior property within a realistic commuting distance, generally measured to be 50 miles